IFC, KKR consider buying stake in China cement maker

Private-equity firm Kohlberg Kravis Roberts & Co. and International Finance Corp. may take stakes in a Chinese cement maker planning a US$720m expansion, according to a statement on IFC’s Web site.

The statement, dated Feb. 14, said IFC, the World Bank’s private-sector investment arm, may take a stake in Henan province-based Tianrui Cement for up to US$30m to help it secure the long-term financing it needs to expand organically and through acquisitions.

A deal would also include loans of up to US$150m, with up to US$45m lent directly by IFC, the statement said. A syndicated loan would account for the remaining US$85m to US$105m.

KKR is also expected to become a shareholder in the company, the statement said. It didn’t say what size stakes IFC and KKR plan to take or when a deal will be finalised.

But the statement estimated the total cost of Tianrui Cement’s long-term development strategy, including production expansion, industry consolidation, and the introduction of new technology, would be US$720m.

A Hong Kong-based spokesman for KKR declined to comment on the likelihood of a stake purchase, describing it as "market speculation."

Tianrui Cement executives couldn’t be immediately reached for comment. IFC spokeswoman Zhu Wenqin said no further information was available as of Monday.

The statement said IFC’s board was due to consider the investment and loans to Tianrui Cement on Friday.